Two plead guilty in case of widespread medical taxi fraud

Defendants arrested as part of a criminal probe into Medicaid fraud appear at Northern District of New York United States District Court in Plattsburgh in May 2018. Two men implicated in an alleged scheme to defraud the state out of millions of dollars in Medicaid funds have pleaded guilty.

PLATTSBURGH | Two men implicated in an alleged scheme to defraud the state out of millions of dollars in Medicaid funds have pleaded guilty.

Nazir has also been ordered to pay $550,000 in restitution to the state Department of Health. He faces a sentence of up to 10 years in prison and an additional fine of up to $250,000 at his sentencing on June 18.

Nazir’s plea deal is contingent upon his also pleading guilty to state charges of second-degree grand larceny and failure to secure workers’ compensation — both felonies — in Essex County Court at a later date, according to the New York State Workers’ Compensation Fraud Inspector General’s Office.

Capital Cab Corporation owner Muhammad N. Jahangir, 24, of Queensbury, pleaded guilty in Ticonderoga Town Court last week to two misdemeanors, petit larceny and failure to secure compensation, a worker’s compensation crime. He’s expected to pay $17,600 in restitution and is due back in town court April 3.

“Today’s guilty plea is proof that we will not tolerate the actions of those willing to victimize their customers in order to steal millions of taxpayer dollars,” New York State Police Acting Superintendent Keith Corlett said in a statement Tuesday.

MULTI-YEAR INVESTIGATION

The pleas are the latest development in a broad, multi-year, joint federal and state investigation of medical taxi fraud that lead to more than 40 felony and misdemeanor charges against the owners and drivers of 11 cab companies in the Adirondacks last May.

Workers’ Compensation Fraud Inspector General Leahy Scott said that these cab companies have “plagued” the Adirondack Northway for years.

Altogether, the companies claimed “multiple millions of dollars in fraudulent Medicaid billings,” according to the New York State Workers’ Compensation Fraud Inspector’s Office.

“These first pleas and restitution orders send a clear message that corrupt medical transport companies will be held accountable,” Scott said in a statement.

CUT-THROAT CULTURE

Criminal affidavits released last year describe a cut-throat culture in which cab companies schemed to allure passengers through a combination of bribes and incentives — including using recovering addicts as pawns — to ferry passengers up and down the Adirondack Northway, sticking state taxpayers with the bill in the process.

For some passengers, the price of loyalty was as little as a bag of tobacco, a tactic used by the owner of a Ticonderoga-based company to secure a round trip ride to a destination that netted the operator a $231.26 payout from the state Department of Health (DOH).

Several passengers have been identified as willing accomplices in the conspiracy, but none have been charged.

Investigators allege that the defendants also failed to provide their employees with Workers’ Compensation insurance and filed documents that falsely certified required insurance coverage in order to provide Medicaid transportation services.

WIDESPREAD FRAUD

Since 2015, Ticonderoga-based Adirondack Taxi & Limo has received about $3.14 million in taxpayer-funded payments, representing about 71 percent of their cash flow between 2015 and 2017, according to a criminal complaint provided by the U.S. Department of Justice.

Ti Taxi received at least $2.45 million during the same time period, constituting as much as 95 percent of their cash flow, according to a financial analysis conducted by the FBI, while Green Mountain and its sister company, Four Way Taxi, received $1.71 million.

In Ticonderoga Town Court last week Jahangir said that his criminal activities were performed in concert with Khurram Gondal, the co-owner of Ticonderoga-based Green Mountain Medical Transportation, Four-Way Taxi, Capital Cab and All NY Taxi and Limo.

Gondal, 38, of Ticonderoga, faces charges of conspiracy to commit health care fraud, first-degree grand larceny, three counts of second-degree grand larceny, third-degree grand larceny, four counts of first-degree falsifying business records — all felonies — and four counts of failure to secure compensation, charged as two felonies and two misdemeanors.

Charges against Gondal are pending, according to the New York State Workers’ Compensation Fraud Inspector General’s Office.

OTHER CHARGES

In all, 14 people from 11 companies have been implicated in the scheme.

Other companies cited include Keeseville-based I-87 Transporters, also known as A-1 Taxi; Moriah Cab Service in Port Henry; Ti Taxi; Advantage Medical Transport, of Ticonderoga; Capital Medallion, also known as Avalanche Taxi; and Crown Point Cab.

Two people — Armstrong and Khalid Chaddher — were also charged with third-degree grand larceny, a felony, and first-degree offering a false instrument for filing, also a felony.

Nauman, Quaiser Gondal, Hayat, Qaiser, Khan and Sana Ullah Chaddher were additionally charged with failure to secure compensation, a worker’s compensation crime, all charged as a felony. Marshall was charged with the same, as a misdemeanor.

SYSTEMIC

Since 2011, the state Department of Health has contracted with a Syracuse-based dispatch center, Medical Answering Services (MAS), to provide medical transportation for Medicaid recipients.

To arrange rides, passengers call MAS, which then dispatches a local vehicle registered with their network for transport.

Medicaid then pays those cab companies through the Department of Health.

In the past, the state agency has contended that the switch from county-run transportation systems to the current model was a cost-savings measure, citing a 28 percent cost-per-trip reduction statewide between 2011 and 2016, a gap that narrows to 15 percent in Essex County.

Between 2011 and 2016, the state spent $758.6 million on these trips, according to the DOH.

In Essex County, taxi companies blossomed in rural areas along Lake Champlain, seemingly to take advantage of a system they knew could be manipulated through loopholes and a lack of oversight from Albany.

Medical Answering Services has not been accused of any wrongdoing in the alleged conspiracy.